Practically Speaking about Retail FM

What Are YOU Doing to Elevate Your Game?

What are you doing to elevate your game? Today’s facilities management professional is a different breed than the individual of 10 years ago. 

The days are quickly disappearing when facilities departments are primarily call centers for maintenance work orders from the stores.  While that’s still an important role, multi-site FM departments of today are expected to be much more. They are asset managers, financial analysts, vendor partners and business unit owners. 

This current breed of FMs is expected to have a different set of skills than in the past.  Continuing education is not optional, it’s a necessity.  Formal education, professional development conferences, skills training, and peer-to-peer education are essential to ensure you are at the top of your game. No matter what stage an FM professional is at in their career – early, mid, or late – you should always be learning and evolving your personal skillset.

This year’s Mid-Year Conference, September 9-11, is focused on elevating your game both personally and as a FM Team.  Take a close look at the program and I’m confident you’ll find a new learning opportunity whether it’s at a session, or talking with your peers or from the industry suppliers who are attending. 

If you can’t join us in Scottsdale, AZ for the conference, make time for a reality check with yourself.  What have you done for yourself to brush up your skills lately?  Managing our time is a challenge for all of us, but it’s a necessity these days to make time for your professional development.  Stop and smell the (proverbial) roses as the saying goes. 

Within the PRSM office, we’re designated “Quiet Time” for one afternoon each month to learn something new, listen to a TedTalk, or set aside reading time for industry publications.  It takes personal discipline to implement. But, we want to prove to ourselves that we’re building our worth and knowledge to make PRSM a better organization. I suggest you try it; you may like it.   


Seven Steps to Asset Sustainability

Sustainable buildings have adapted to have more sustainable designs, accessible layouts, and green building materials with longer life cycles at comparable costs. Facility managers are tasked with maintaining the beautiful sustainable stores and facilities at a low cost. Michael B Cowley, President, CE Maintenance Solutions, LLC described a seven step process for sustaining sustainable operations.

The first step is to develop the culture and traditions of sustainability. Developing a roadmap is crucial to maintaining the standard required for sustainable initiatives. If a culture of sustainability, cost savings and innovative ideas are supported, constant innovation is achievable. 

The second step to asset sustainability is to properly staff your organization by assessing your organizational structure and developing processes and procedures. Cowley remarked, “If you do not have your standard operating procedures written down, you do not know what you’re doing.”

Then you will want to create your asset data management as the next step. As Cowley says, “You have to have a complete birth certificate on your assets.” In addition to tracking assets, Cowley recommends every piece of critical equipment should have a preventative maintenance plan. With this information and proactive maintenance, FMs can predict the life of their assets.

The next step is work planning and scheduling. Cowley says FMs should treat their planned work orders like a recipe, as it includes the ingredients (parts and tools), the instructions (procedures) and the preparation time.

The fifth step is to have preventative and predictive maintenance programs in place. If the culture encourages proactive maintenance, there will be less unexpected repairs which can ultimately keep maintenance costs down.

The sixth step is to implement craft and skill training. Cowley discussed what he termed the “maintenance crisis.” He believes FMs are challenged to find qualified technicians and each company should have a mandatory program for each employee. Cowley even goes so far as to say five to ten percent of all staff hours should be dedicated to training.  

The final step is procure and stock critical parts for assets. Major equipment should have their critical parts in house to minimize downtime.

For more information on asset sustainability, watch Cowley’s PRSM On-Demand webinar, “Maintaining Aging Equipment and Infrastructure without Breaking the Bank.”


The Transformational Economy: Transactions are No Longer King

The retail industry is transforming. Facility professionals have seen the changes over the years within their stores, whether it is new technologies being installed or what (and how) the shopper is making transactions within the store. Now it’s time for the landlords to respond to this transformation.

In the ICSC RECon educational session, “Envision 2020 Town Hall: Redefining Our Industry,” Stephen Lebovitz, ICSC Chairman and President and CEO of CBL & Associates Properties, Inc., led a panel discussing how shopping centers are reacting the transformation of retail. Out of all of the discussion between the real estate developers, it became clear: Shopping centers are becoming a hybrid between community center and retail destination. This is especially true of shopping centers, usually built in the late 80s, early 90s, which now need to be repositioned due to decreased traffic or other high performing centers in the area. The experts all agreed the most successful repurposed shopping centers will embrace interactive and engaging new concepts that are appropriate for their surrounding demographics.

Brick and mortar is not dead by a long stretch, just transformed into more of an experience. The new measure of success for landlords is the length of time people are staying in the complex – are they attending a cooking class and following it with dinner? Are they going to the children’s museum and then swinging by to get a new outfit?

This new measurement does pose a threat to how leases are developed. Square footage is no longer always an acceptable factor when a tenant isn’t selling any goods. These interactive experiences and stores who are choosing to “showcase” their goods to eventually be bought online will need a new type of lease to take into account the community areas being utilized. Retailers are becoming successful bending the physical and digital shopping experience, but now it is time for shopping centers to transform how they are structuring how to structure their leases and account for non-revenue businesses using the common spaces. 

The repurposing of shopping centers will also be advantageous for the supplier community, as the suppliers are already familiar with the properties and can gain these new concepts as customers. How do you think the transformation of the shopping mall will continue to change how vendors and retailers do business?


Imported Wood Flooring from China Raises Health Concerns

Environmental, Health, and Safety

Concern over imported wood flooring from China reached global audiences recently when 60 Minutes reported that a large supplier of imported flooring to the U.S.  knowingly provided products with high levels of formaldehyde, a known carcinogen. Although the company has denied its products are dangerous, the debate is ongoing.

According to PRSM Member Randy Weis, Chief Executive Officer of RD Weis Flooring Solutionists, now would be a good time to investigate the source and manufacturing origins of flooring purchased during the past few years and especially flooring installed in California, which has strict guidelines regarding the amount of formaldehyde present when the flooring is unpackaged and installed.

As an ongoing precaution Randy recommends purchasing flooring materials made in the U.S., to U.S. specifications.

"The products from China are very popular," Randy says, "they are less expensive and that is a key reason for their widespread use in commercial and residential applications. I would say that if you are using LVT or Laminate flooring from China, the cost increase vs U.S.-made, safe products is probably less than $2,000 per retail store. A small price to pay to insure the public safety."


Strategic Sourcing Retail FM: Lowering Costs without Sacrificing Quality of Service

The pressure to lower costs continues to impact how FM services are bundled and in some cases broken out of the traditional delivery model. In some areas such as janitorial, the services are being commoditized and the motivation to lower costs is actually driving small companies out of business, giving the impression that retailers don’t care about clean store environments.

Responding to the need to help retailers and suppliers navigate through the process with the added level of scrutiny and interaction from procurement, the PRSM Sourcing Committee has developed a comprehensive set of user-friendly worksheets that can help the entire industry collaborate more effectively.

The updated PRSM Sourcing Toolkit now includes a collection of worksheets to assist retailers from documenting needs and maintaining standards to completing scorecards from respondent material. The materials are useful to suppliers in better understanding how to respond to RFPs, while differentiating services and making the case for greater transparency.

PRSM Members go here to Download the interactive Sourcing Toolkit User Guide. You may download the templates individually or as a combined unit.

  1. Needs Assessment - a guide to help you outline your requirements.
  2. Execution Timeline: an outline to help you segment the time required to reasonably complete each step in the process.
  3. Financial Implications: a guide to help you compile your terms of service.
  4. Identify the Providers: a guide to help you create a short list of providers to receive the RFP.
  5. Create the RFP: a guide to help you structure questions and goals of the RFP.
  6. Ranking the Respondents: a comprehensive guide to ranking and scoring respondents, to assist in final decision making.

Download All Templates + User Guide (ZIP File)

Thanks to the Sourcing Committee for providing these resources. Good luck and happy sourcing.


Lower the Cost of Service Calls by Adopting Fleet Operational Standards Found in New PRSM Benchmarking Report

Budgets, Finance and Metrics

Although the bottom-line on every invoice doesn't include a breakdown of the many costs incurred when a truck and technician show up at the retail store location, the more retailers and vendors understand about this aspect of the business, the better they can strategize to minimize these costs where possible.

Matt Ashwood, PRSM Member and President of Bonded Filter Co., who participated in the new PRSM Benchmarking Report "Supplier Fleet and Technician Operations and Practices" said the results provided him with direction on lowering costs. "About seven percent of our overhead relates to fuel, lodging and per diem, basically the cost of keeping trucks and technicians out in the field. That's a big number," Matt said, "and understanding what others do to manage those expenses is beneficial for us."

"When we see increases in our expenses it puts pressure on our bottom line. We studied these survey results and made some changes to align our company with the best practices provided in the report. The effort we put in to managing our costs enables us to deliver a cost effective service to our clients."

Here are some key findings from the newest PRSM Association Benchmarking Report "Supplier Fleet and Technician Operations and Practices."

  • More than 90 percent of the suppliers use gasoline vehicles. However, 62.5 percent of the suppliers use only gasoline vehicles. Other fuel types might be more economical, depending on factors like distance traveled, percent of city travel vs. highway travel and cost of alternative fuels.
  • The maintenance on the vehicles is performed by in-house staff at one-half of the supplier companies. Most companies in this study who service vehicles in-house and purchase parts and supplies in bulk reported higher maintenance costs.
  • Suppliers spend more on repairs than on regular maintenance. The average regular maintenance cost for changing oil, filters, etc. for a truck is $1,593 per annum versus the average repair cost of $1,881 per truck annually. The average regular maintenance cost for changing oil, filters, etc. for a van is $1,192 per annum versus $1,377 for repair.
  • Suppliers reported increased customer satisfaction and more efficient routing because of the ability to track vehicle location. Sixty-three percent of the suppliers track the real-time location of their fleet.
  • Most companies, (i.e., 72 percent) have work that requires technicians to spend less than two nights per month out of town and use hotel accommodation. More than one-half of the suppliers, (i.e., 55 percent) reimburse the technician for actual expenses and 27 percent of the companies compensate the technician by paying a fixed amount per day.
  • Only 40 percent of the suppliers have coverage for uninsured / under insured motorists.

Were you surprised by the results of this survey? Like Matt, did you find areas for improvement in the results?


Are you prepared for "the talk?"

Budgets, Finance and Metrics, Sourcing, Purchasing, and Procurement

Are you prepared for "the talk?" Not with your kids, but with your C-Suite.   

During the weeks that have passed since drafting my article for the November/December PRSM Magazine, my unofficial count of recent executive changes in retail has increased from 25 to 28. 

As a key player in the success of your CEO, have you asked yourself how you can help her or him be successful? Stores are a huge asset on any retailers' balance sheet, so naturally those costs are highly visible. Have you assured your C-suite that you're part of the solution, not the problem?  As a service provider have you considered how your services added to that brand's value? 

CEOs need you (although they may not always know it) to be at the top of your game each day. At a moment's notice, can you concisely articulate the value facilities management or sourcing brings to the brand? Do you have your talking points written? How about those statistics which demonstrate the savings you have generated in the past year? This presents an opportunity to sell yourself that you can't underestimate. 

Too many FMs aren't ready for this conversation and miss the chance to prove the value of a strong FM team. I've spoken to a few professionals who just want to fly below the C-suite radar and hope questions never come. I know others who are well prepared and have their talking points and analyses ready. To help you prove your value, PRSM has developed Talking Points to get you started. You can get our new resource tool by emailing me directly at pdameron@prsm.com.

And while you're at it, demonstrating your team's value to the success of the brand, don't forget to put in a good word for PRSM Association and the value it provides to you as Retail Facilities Management Professionals.  


Is Your Data Informing, or Driving, Your Decision Making

Budgets, Finance and Metrics, FM Business Practices and Strategies, Sourcing, Purchasing, and Procurement, Technology, Vendor Management

Data mining and analytics has always been second nature to facilities managers, Kirk Beaudoin, 2014-15 President, PRSM Association, said in his opening commentary in the 2015 Trends Report.

In one of the Report’s profiles of excellence in retail facilities maintenance we learn how Nike with the help of its service provider, ServiceChannel, combined efforts to help the global retailer improve their decision-making processes and strategic planning.  Nike developed a report on janitorial costs, breaking the information down to spend per store and per frequency. “We then used pivot tables to look at several what-if scenarios,” said Shawn Browning, Territory Facility Manager at Nike. 

In another report we see how Brixmor Property Group is gathering and analyzing data thanks to a Divisions Maintenance Group mobile application. The app helps them capture data related to site inspections and helps property managers keep track of each work order via a dashboard, which aggregates information and displays it in a manner that brings attention to problems that require immediate attention. 

Two days of exploration on data gathering and data management produced a number of valuable learning opportunities at PRSM Mid-Year Conference, held last month in Columbus, OH including a presentation by Douglas Stephens, the Retail Prophet, giving a global perspective on the value of data to all parts of retail, followed by sessions conducted by retail and vendor subject matter experts from Lowe's, Wiedenbach Brown, Sears Holdings Co., PETCO Animal Supplies, Walmart Stores, Gap, Family Dollar Stores and others. Download decks from many of the sessions at this link and continue the discussion, online at our LinkedIn Group

The quest for more data is likely to continue in parallel with the need for better data management and analytics, tools and processes. Take advantage of your PRSM resources to learn how others are making the most of their existing data and are learning how to be data-informed and not necessarily data-driven.


Self-Performing vs. Non-Self Performing: The Debate Continues

FM Business Practices and Strategies, Vendor Management

Do self-performing contractors really exist? Or, are you more likely to stumble across the Loch Ness Monster in your search for one? And is it self-performance that really matters?  This discussion gets a fair amount of play across the industry and rightly so, as we have seen in the proliferation of commentary on the topic.

In “Self-Performing Lighting Contractors and the Lock Ness Monster,” an article in the coming November/December PRSM Magazine, John Loheit at the Energy Management Collaborative warns, “The reality is that most contractors who claim to be self-performing might be on some level, but possibly not for a project of considerable size. The self-performing model that allows a firm to gear up for 300 locations and then gear down while it waits for another 300 store roll-out isn’t practical – unless the roll-out you are planning takes place over a period of 18 months or more.” 

“To provide a competitive price, it is important for the vendor to keep the amount of movement by crews to a minimum. The company that won the bid knows this. While it may have claimed to be self-performing, the plan all along was to take advantage of the local partners it’s worked with in the past to live up to the contract. The contracting company banked on the fact that rapid response was more important than whose truck actually showed up to the location.

In her recent PRSM Magazine article Self-Performing: Evolution or Revolution? Susan Dykman of NRS Construction and Facilities Management says that although “pure self-performing companies exist on a local or regional basis, I know of no company, in any of our service trades, that can honestly say they self-perform all of their services on a national basis.”

“Having worked on ‘both sides of the fence’ I can safely say that the retailer benefits strongly from the self-performing model.” In this model, “Service-level compliance is at its highest level, there is a much greater control of the actual work being done and the professionalism of the technician can be closely monitored.”

For more reading on this ongoing topic, go here.

 


Planning for 2015: is Yours a Bottom-Up or Top-Down Approach?

Budgets, Finance and Metrics, PRSM, Sourcing, Purchasing, and Procurement, Vendor Management

In the July/August PRSM Magazine, Tips and Trends, Amruta Vantipalli, PRSM Association Industry Program Manager, provides a high-level review of the Retail FM budgeting process using data from a recent survey “Retail Facilities Management Industry Overview.” More than 100 retail organizations participated in the survey, which reflects a combined 135,000 stores with more than 2.3 billion gross square feet equaling over $3.1 billion in annual FM budgets.

Among the challenges in estimating annual expenses – the survey points to evolving organization needs and customer needs, fast changing technologies, sales, etc. Internal budgeting processes, also add unique challenges to the process. Two approaches seem to be prevalent:

  • Top-Down Approach: when top management prepares the budget and conveys to the team the performance goals and expectations.  
  • Bottom-Up Approach: with middle management preparing the budgets and seek approval from top management.

Both have advantages and drawbacks. The Top-Down Approach can sometimes alienate management teams, who find it difficult to balance store needs with upper management’s lack of insight. Although the bottom-up approach gives the opportunity for lower-level managers to drive the budget, and at the same time improve team morale, one drawback to this approach is the time consumed by the team involved in the back-and-forth process. 

According to the PRSM survey, about 21% of retailers use a bottom-up approach and arrive at their total budget either by summing up the budget for each store or by summing up the budget for each trade. Typically these retailers have fewer stores and less store area on average compared to the retailers using other approaches. 

The survey also revealed that 62 percent of respondents use incremental budgeting due to its simplicity and popularity. 

See the complete results for this survey, which explores finance and budgeting as well as a wide variety of other topics, including the FM Business Model used across the industry, maintenance strategy, vendor management, technology and sustainability. Follow this link.

 

 


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